In a collaborative effort between the public and private sectors, more than 83% of the regulatory barriers hindering the establishment of an artificial intelligence (AI) smart city in Seongju have been dismantled in the past two months. The remaining ten or so issues, including farmland acquisition and environmental assessments, are expected to be resolved within the year.
Hyundai Motor Group has decided to invest approximately 9 trillion won to develop Seongju into a hub for physical AI, indicating strong government support for this ambitious project. If the public-private partnership strategy proves successful, Seongju could emerge as a new growth engine in the southwestern region of the country, joining the ranks of Pangyo (platforms), Yongin (semiconductors), and Ulsan (automobiles and shipbuilding).
A senior government official stated on June 8, "Hyundai has lifted about 50 of the significant regulatory barriers that had made them hesitant to invest in Seongju. The remaining issues, which involve property rights and environmental impact assessments, will be addressed in the upcoming fourth meeting of the Seongju-Jeonbuk Innovation Task Force (Seongju TF)."
The fourth meeting is likely to take place after the confirmation process for Han Seong-sook, the nominee for Prime Minister, is completed in mid-July. The official emphasized, "The government's clear stance is to aggressively remove any regulations that hinder the establishment of Seongju as a K-Physical AI base."
In late February, Hyundai Motor Group signed a memorandum of understanding with the Jeonbuk Special Self-Governing Province to foster advanced industries in robotics and hydrogen, as well as to develop an AI hydrogen city. The group plans to gradually invest 9 trillion won starting this year, which represents about 10% of the promised total investment of 125 trillion won by 2030, focused on a single region.
The government has also acted swiftly, forming a comprehensive Seongju TF led by the Prime Minister's Office in early March. Over the course of two months, they have achieved an unprecedented pace in lifting 83% of the overall regulations by the end of May. Kim Min-seok, who chaired the third TF meeting on May 15, reportedly urged, "The competitiveness of physical AI relies on speed, so we need to resolve the remaining regulations as soon as possible."
With the easing of regulations, the development of co-location facilities—where data centers are built alongside power plants—has become more feasible. Co-location involves constructing data centers and power plants as a package, which enhances development efficiency. However, in South Korea, the approval process has been stringent, and there have been few instances of implementation due to differing interpretations of added value among government, public, and corporate entities. Direct electricity trading is also likely to be introduced. If realized, Seongju will evolve into a cradle for AI, where data centers and robots are continuously learning through integration with eco-friendly energy sources.
Particularly, with the Lee Jae-myung administration prioritizing regional balanced development as a key national agenda, the development of Seongju is expected to gain further momentum. The first policy test for Han Seong-sook, the newly nominated Minister of SMEs and Startups, is likely to be centered on Seongju. Recently, President Yoon Suk Yeol emphasized during a meeting with Chung Eui-sun, chairman of Hyundai Motor Group, that "the government will respond to the bold decisions of businesses with even bolder support," and pledged to significantly reduce regulatory and administrative barriers to ensure that Hyundai's investment benefits both the company and the region.
* This article has been translated by AI.
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